Vukile gets Competition Commission green light for Synergy buy-out
Vukile Property Fund’s long-term pursuance of Synergy Income Fund was a step closer to completion on Thursday after the Competition Commission recommended that the Competition Tribunal approve the deal without conditions.
JSE-listed Vukile currently had a 39% stake in Synergy after triggering a mandatory offer by acquiring further Synergy B-linked units in November.
This followed Vukile’s withdrawal from negotiations in September to pursue an alternate route to gain control of Synergy after the parties failed to agree on pricing for 34% of Synergy B-linked units.
At Vukile’s interim results presentation last month, CEO Laurence Rapp confirmed that it would offer to acquire the remaining Synergy B-linked units at a swap ratio of one Vukile linked unit for every 2.67 Synergy B-linked units, and extend a comparable offer to Synergy A-linked unitholders at a swap ratio of one Vukile linked unit for every 1.65 Synergy A-linked units.
While the commission had placed no conditions on the deal, the organisation raised a potential public interest concern over an exclusivity clause in favour of Spar in the lease agreement of the Synergy-owned Kwa-Mashu shopping centre, in KwaZulu-Natal.
However, the commission had imposed a condition on Synergy in 2011, when the fund initially acquired a 100% interest in the shopping centre, that it would have to negotiate with Spar for the removal of the exclusivity clause contained in the lease agreement upon its expiry in 2015.
This obligation would now be placed on Vukile should the transaction be successful.
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